AI Drafter 
TaxTMI 
TaxTMI 
TaxTMI 
2019 (8) TMI 47
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.... department on 06.09.2007 at the business premises of the assessee group. During the survey, disclosure of Rs. 1.81 crores was made by Shri Maganbhai Radadyi, a key person of the group on behalf of the following concerns : Name of the Firm Name of the Project Amount (Rs.) M/s. Vraj Corporation Vraj Bhoomi Township (Sector No.1) 1,03,50,000/- M/s. Vraj Developers Vraj Bhoomi Township (Sector No.2) 58,50,000/- M/s. Vrundavan Developers Vraj Ratna Residency 19,00,000/- Total 1,81,00,000/- 3.1. By disclosing the income, assessee admitted that the said income was not recorded in the regular books of the firms. Therefore, the same was disclosed as undisclosed income which was over and above the regular income earned during the year. However, during the assessment proceedings, it was noticed by the A.O. that assessees have included the disclosures of Rs. 1,03,50,000/- and Rs. 58,50,000/- in the total turnover of respective firms which represent the receipts on sale of flats/shops and consequently, claimed deduction under section 80IB(10) of the I.T. Act on net profits of Rs. 11.79 crores and Rs. 7.48 crores and finally total income wa....
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....ounting and profits have been disclosed as per this method for claiming deduction under section 80IB(10) of the Act. It was also submitted that all the required conditions for claiming the said deductions have been fulfilled by the assessee firms. In respect of claiming deduction of undisclosed booking receipts, it was submitted that the said receipts have been transferred to its P & L A/c, therefore, it has to be considered as business income and not income from other sources. The Ld. CIT(A) reproduced the written submissions of the assessee in the appellate order in which the assessee reiterated the same facts that assessee firms have adopted PCM of accounting and claimed deduction under section 80IB(10) accordingly as the project was completed during the year ending March 31, 2010. The assessee referred to statements of the key person recorded during the course of survey in which while disclosing the amount as undisclosed income explained that said undisclosed income was from the above three projects which is over and above the regular income earned during the year. It was, therefore, claimed that the said amounts are business income of assessees and as such entitled for deducti....
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....e and correct manner. These provisions are not for those assessees who hide their income deliberately and consciously. In the case of appellant, it was obliged to disclose the receipts of Rs. 1,03,50,000/- & Rs. 58,50,000/- in its books of account truly and correctly which, as admitted by appellant itself, was not disclosed in its regular books of account with the intention of hiding it to the department. This shows the appellant has acted deliberately in defiance of provisions of law and conducted dishonestly and acted in conscious disregard to its obligation. And, after conducting in this manner, it has claimed the benefit of deduction u/s. 80IB(10) also and did not pay any tax. Thus, the appellant has got the benefit of deduction even after concealing the income and not disclosing it voluntarily. It has disclosed the said income only when the department detected the concealment during survey proceeding and confronted it to the appellant. On the similar facts, Hon'ble Delhi High Court in the case CIT Vs. Usha International Ltd. says that when the assessee is cornered by the evidence or material collected by the Revenue Authorities, even by filing by revised return assessee ca....
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....hod can give ample opportunity to such evaders/defaulters to manipulate the accounts and receipts/expenses and get away by showing the fictitious higher income out of such business and claiming deduction u/s. 80IB(10) and thus increasing their capital without paying any tax as whatever the income is earned as net profit from the business, whether disclosed or undisclosed, would get exempted. In a hypothetical situation, if an assessee computes net profit of Rs. 10 crores on the basis of regular books of account from a housing project entitled for deduction u/s. 80IB(10), and during survey proceedings discloses unaccounted receipts of Rs. 50 crores without giving any spec fic details, he would be benefited with the provisions of deduction u/s. 80IB(10) and can convert his black money into white without paying any tax by taking shelter of these incentive provisions. Same thing has happened in the case of appellant also. He has converted his unaccounted money into accounted income by taking shelter of the provisions of section 80IB(10) of the Act, I think the incentive provisions are not meant for such assessees. These provisions are meant for those assessees only who comply the provi....
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....e computed by appellants in their regular books of account, therefore, not entitled for deduction u/s. 80IB(10) of the Act. The cases laws relied upon by appellant in its submission are clearly distinguishable as in none on the cases this aspect of issue has been the subject matter. 5.3. Without prejudice to the above, now I deal with the Issue related to head of income to assess the aforesaid unaccounted receipts. During the assessment proceedings, AO asked the assessee to furnish the specific details such as names and addresses of the persons from whom amounts were received, their PANs, amounts, dates etc. to verify the claim of appellant that these receipts are actually business receipts from, its eligible projects. However, the appellant failed to furnish those details on the plea that it does not retain such details. It is very strange to note that in respect of accounted receipts, complete details have been maintained by appellant but for unaccounted receipts, not a single detail has been furnished. In absence of such details, it is difficult to imagine how the amounts of Rs. 1,03,50,000/- and Rs. 58,50,000/- have been arrived as unaccounted receipts from the project....
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....sed income would be business income of the assessee. He has referred to earlier years assessment order, referred to the case law which are filed in the paper book. 6. On the other hand, Learned D.R. relied upon the Orders of the authorities below and submitted that assessee did not file details i.e., names, addresses and particulars of the persons from whom receipts are received. Assessees did not provide any details as to from which project undisclosed income have been earned. Since no entries have been made in the books of account of the impugned amount, therefore, it could not be treated as business income of the assessee. He has submitted that assessee did not comply the conditions of Section 80IB(10) of the I.T. Act, therefore, no deduction could be allowed to the assessee and income have been correctly taken as income from other sources. 7. We have considered the rival submissions and perused the material available on record. The assessee claimed deduction under section 80IB(10) of the Act. The same is reproduced as under : "Section 80IB(10 : (10) The amount of deduction in the case of an undertaking developing and building housing projects approved be....
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....feet at any other place, (d) the built-up area of the shops and other commercial establishments included in the housing project does not exceed [three] per cent of the aggregate built-up area of the housing project or [five thousand square feet, whichever is higher];] (e) not more than one residential unit in the housing project is allotted to any person not being an individual; and (f) in a case where a residential unit in the housing project is allotted to a person being an individual, no other residential unit in such housing project is allotted to any of the following persons, namely;- (i) the individual or the spouse or the minor children of such individual; (ii) the Hindu undivided family in which such individual is the karta, (iii) any person representing such individual, the spouse or the minor children of such individual or the Hindu undivided family in which such individual is the karta.] [Explanation - For the removal of doubts, it is hereby declared that nothing contained in this subsection shall apply to any undertaking which executes the housing project as a works contract awarded by any person (including ....
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....e been furnished before the authorities below. Thus, the primary burden upon the assessee to prove conditions of Section 80IB(10)of the I.T. Act have not been satisfied in the present case. The Hon'ble Punjab & Haryana High Court in the case of National Legguard works vs. CIT(A) & ANOTHER [2007] 288 ITR 18 held as under :. "Special deduction under section 80HHC of the Incometax Act, 1961 can be claimed only on showing facts which make the assessee eligible for the deduction. The burden to prove these facts is on the assessee and not on the Revenue. There could be no presumption that surrender made on account of unexplained stocks represents export income. The assessee was a manufacturer and exporter of sports goods. It filed its return for the assessment year 1999- 2000 declaring an income of Rs. 6,67,850. A survey was conducted under section 133A on the assessee. The survey party found that the stocks physically available at the premises of the assessee were in excess by Rs. 11,97,809 of the stocks reflected in the books of account. In order to cover the discrepancy, the assessee offered to disclose an additional income of Rs. 12 lakhs over and above the normal b....
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....) in which the ITAT has set aside and quashed the Ld. CIT(A) order and restored the Order of the A.O. In this view, the Tribunal observed that assessee shall be entitled to deduction under section 80IB(10) of the Act in assessment year. In the present appeal on showing to the satisfaction of the A.O. that condition stipulated would not have been complied with in accordance with law. Learned Counsel for the Assessee submitted that A.O. thereafter dropped the proceedings. However, it is very specific that even the Tribunal has directed that assessee would be entitled for deduction under section 80IB(10) of the Act if assessee satisfied the conditions of the aforesaid Section to the satisfaction of the A.O. as per Law. There is nothing in the set aside Order of the A.O. if he was satisfied about the conditions of Section 80IB(10) of the Act have been complied with by the assessee. Therefore, such reference of the earlier years Order would be of no help to the assessee. Merely because assessee in the accounts have stated that impugned amount is earned from the project would of selfserving without substantiated by any evidence or material on record. Learned Counsel for the Assessee reli....
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.... receipts. The contention of the Learned Counsel for the Assessee that assessees has no other housing project, therefore, it should be accepted that assessees has business income only is based merely on presumption. Further, it is settled Law that presumption and suspicion cannot take place of the proof. Therefore, this decision would not support the case of the assessee. Learned Counsel for the Assessee also referred to certain decisions of ITAT, Ahmedabad Bench, copies of which are filed in the paper book in which it has been accepted that undisclosed receipts were part of business income of the assessee. Therefore, such decisions would not support the case of the assessees. Learned Counsel for the Assessee also relied upon Judgment of the Hon'ble Bombay High Court in the case of CIT vs. Sheth Developers Pvt. Ltd., 254 CTR 127 in which it has been concluded "consequent to the retrospective amendment in Explanation to sub-section (1) of Section 158BB of the I.T. Act w.e.f. 01.07.1995, while computing undisclosed income for the block period, assessee is entitled to claim deduction from its income under section 80IB of the I.T. Act." 7.4. This decision is clearly distinguisha....